Meta’s Earnings Drag Down Nasdaq Futures

Nasdaq-100 futures are down more than -1% in early trading, weighed down by a negative earnings move in Facebook and Instagram’s parent company Meta Platforms (META). The social media juggernaut was down more than -19% at one point in yesterday’s postmarket session, but losses have pared back somewhat. Even though Meta beat on earnings and revenue, shares moved lower because revenue guidance disappointed Wall Street.

The /NQ contract has struggled in recent weeks and was down about -6.5% from the all-time highs as of yesterday’s close. Price initially rose yesterday after two days of gains but failed to take out the 63-day Exponential Moving Average and collapsed shortly after the open. Price is below the 63-day EMA and other commonly followed moving averages, such as the 21-day EMA and the 50-day Simple Moving Average, and these lines additionally are now sloping downward. This is an important sign of potential trend shift. Momentum also is in the hands of the bears according to the Relative Strength Index (RSI). This indicator has been trending down and making lower highs since December even as price continued to rise and is now below the 50 midline. It briefly crossed below the oversold area, but price recovered and crossed back out the next day.

If price keeps moving lower, look to the recent lows from April 19 around 17,113, which roughly line up with the old highs from December. Beyond that, the yearly Volume Profile shows a node around 16,885, so this could be another area to look for support. In terms of resistance, the 63-day and 21-day EMAs are fairly close together and provide an upside zone to watch between about 17,800 and 17,867. After that, the old supportive lows around 18,063 are now resistance to watch.

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